Canada’s finance ministers were forced to push back a press conference Monday as they continued to hammer out an agreement in principle on reforming the Canada Pension Plan (CPP).
Under the agreement, staring in 2019, contributions for a typical worker earning about $55,000 would initially increase by $7 a month and employers would match those contributions.
The plan will be phased in over seven years until 2025 and it means when people retire their maximum annual benefits would increase by about one-third to $17,478.
“We did it in a way that was very gradual,” federal Finance Minister Bill Morneau said. “We’ve decided to put in place an improvement in the system that starts in 2019, which is still two-and-a-half years away for business and employees to adjust, and won’t fully come into place until 2025.”
There were two provinces which abstained from signing the agreement – Quebec and Manitoba – although they will remain a part of the discussion.
“They are very collaborative and engaged and continue to be a part of this discussion,”
A change to the CPP needs the consent of Ottawa and a minimum of seven provinces representing at least two-thirds of the country’s population.
Morneau says they’re going to improve the pension plan in a way that will make a difference to working Canadians.
“What we are doing is improving the retirement situation for future generations of Canadians,” Morneau said.
Ontario, which had been working on a plan of its own ahead of the meeting, appears to be satisfied with the outcome.
Ontario Finance Minister Charles Sousa said afterwards that if the national agreement is ratified by the July 15th deadline, the Ontario government will scrap its plan.
“Today, this federal government has shown great leadership and great desire to do something of great benefit for our young people.”
British Columbia Finance Minister Mike de Jong said the plan is affordable for employees.
“I think we have reached a balanced approach to setting the objectives that were set out.”
With files from Canadian Press